Editor’s Letter: GOING OVER TO THE DARK SIDEWhat would happen if technology existed mainly for the benefit of fraudsters?Financial IT focuses on the intersection of financial services and technology with the assumption that innovation will be deliberate – and for the benefit of businesses and people.Now suppose that we went over to the dark side, and assumed that innovation is deliberate – and for the benefit of fraudsters and other bad actors.As one of the contributors to this edition notes. “Data from industry body UK Finance shows that losses from unauthorised transactions increased by 2% in 2024 to £722 million, with a 14% increase in the total number of cases to 3.13 million.Given the speed of instant payments and the growing complexity of fraud schemes, risk approaches that require long post-transaction windows will become powerless as fraudsters put emerging technology to the test.UK Finance reveals that criminals are utilizing agentic AI at an ever-increasing pace, simplifying and cutting the cost of fraud schemes in the process. To fight fire with fire, banks will also need to employ the speed and power of AI to keep fraudsters in check and protect instant payment integrity, as well as bank profitability.”Another of our contributors discusses the findings of a new report that that company had commissioned. “Firstly, we saw that current fraud prevention creates competitive disadvantage and market distortion, as smaller players are unable to compete on a level playing field with more established businesses.Secondly, fraudsters are now primarily exploiting human psychology to get their hands on funds, and fraud prevention technology and regulation are not built to address the relevant human vulnerabilities.Finally, within current frameworks, regulation cannot evolve as rapidly as criminal operations, and businesses incur the cost of abiding by laws the criminals successfully evade. Conflicts are inherent, and cannot be resolved at an institutional level, and the Financial Ombudsman may become the de facto regulator for such cases.”All this has serious implications for banks. As a third contributor to this edition notes, fraud “has moved beyond opportunistic activity into something that increasingly resembles a structured industry.The scale of the issue is overwhelming as global scam losses have reached an estimated $442 billion in just one year, which is only the tip of the iceberg, with the majority of adults experiencing at least one attempt and nearly a quarter losing money. These figures point to a model of financial crime that has changed at its core.Behind that staggering figure for global scam losses lies an uncomfortable truth: banks green-lit every single one of those transactions, unwittingly funnelling that money directly to criminals.”So, what is the good news?Even if Financial IT were to go over to the dark side, we would be forced to concede that the victory of the fraudsters is not assured. As the organisers of this year’s Money20/20 Europe event in Amsterdam (2-4 June) note, “in a year where fraud dominates headlines and AI raises existential questions, the regulatory race will decide who leads and who falls behind.Regulators are no longer lagging innovation; they’re accelerating it. The rules are being rewritten at breakneck speed, yet unevenly across borders and often fiercely contested, creating both opportunities and headaches for global players.From MiCA to the UK’s APP fraud reimbursement rules and the looming European Anti-Money Laundering (AML) package deadline, the pace of regulatory change can either fuel innovation or choke it, deciding who thrives and who stalls.”Fortunately, there are opportunities for good actors. Some have in fact been able to keep up with the pace of regulatory change. As one of our contributors notes: “Technologies once seen as disruptive alternatives have become embedded in the financial lives of millions of consumers and businesses. For example, recent predictions have suggested that digital payments will make up 79% of global eCommerce value by 2030.”The same contributor notes highlights the rise of account-to-account (A2A) or Pay by Bank payments. Sovereignty [i.e. the question of who actually controls defence, supply chains, energy and payments] “depends not just on rails, but on the innovation of the businesses adopting infrastructure and translating it into trusted, widely used payment experiences.”It is not yet certain what will be the role of stablecoins in these changes. As yet another contributor to this edition of Financial IT notes, “with the global stablecoin marketcapitalisation surpassing $300 billion in late 2025, it is easy to see why treasurers, fintechs and some forward-looking banks are paying attention.” Nevertheless, “traditional payment rails are quietly becoming real-time, tokenised and borderless themselves, and they are doing so with the regulatory foundations, consumer protections and settlement finality that stablecoins still lack.”However, we are sure of three things. Financial IT is not going to go over to the dark side. The forces of good and right will prevail in the world of payments. Money20/20 Europe, which we are pleased to support as a media partner, will provide answers to all the questions raised in this edition of Financial IT (and more). We wish everyone who is involved a most successful event in Amsterdam.Andrew Hutchings, Editor-in-Chief, Financial IT financial_it_summer_edition_2026.pdf01 Jun, 2026Yes0